Can an Employer Just Terminate Your Contract? | Contract Termination

Can an employer terminate a contract? It depends on what it says in the contract. In any employment contract, it’s going to list the term in termination. There’ll be a term section, meaning how long the contract lasts and whether it renews automatically or not. And then, there’s also a termination section, which states how either party can terminate the contract. Let’s go through that section first. There are several ways either party can terminate a contract. If it’s a fixed term, let’s say it’s two years long and doesn’t automatically renew. If neither party renegotiates nor signs a new agreement, it ends. The contract terminates. And that’s it.
If they agree to part if one side says, this isn’t working out, and the other agrees. You know what, let’s wash our hands off this and walk away. Then that’s fine if it’s through a mutual agreement. The most common way to terminate a contract is through without-cause termination. And in most contracts, there will be a section that states either party can terminate the agreement at any time with a certain amount of notice to the other. Usually, somewhere between 30 to 90 days is standard. Not only can the employee terminate the employment contract, but the employer can also. Why would someone terminate a contract without-cause? If you’re the employee, maybe you found a better job, you’re moving, you have family concerns, or you’re taking a break.
Two Ways to Terminating the Contracts
All of these things are important. And if, let’s say, they did have the two-year term. You wouldn’t want to work for those two years by force if you didn’t want to be there anymore. That’s why the without-cause termination is in an employment contract. And then, from the employer’s perspective, they don’t want to employ an employee that isn’t working out. It’s either a bad cultural fit or personality clashes. Maybe they’re just not productive. For those reasons, the employer wants the ability to get rid of the employee as well. In most employment contracts, there will be a notice period. In those conditions, I just gave none of those involved the breach of contract. That’s the last way a contract can be terminated for-cause.
And in that case, if one of the parties is breaching the contract. The other party lets them know they’re in breach, and generally, they have what’s called a cure period. The cure period allows either party to fix whatever the breach is, somewhere between 15 to 30 days. And if that breach is fixed within that cure period, then the other party cannot terminate it with-cause. Let’s say you are an employee and you’re not being paid an agreed-upon bonus. You would say, employer, you’re in breach of contract. You need to pay me whatever I’m owed. If you don’t pay me, then I have the option of terminating the contract immediately. It’s rare for a contract to be terminated for-cause.
Now, in some professions, it’s obvious for-cause termination. Let’s say you’re a doctor and you lose your license or any license profession, accountant, doctor, dentist, veterinarian.
Absence of Without-Cause Termination as a Red Flag to an Employer
The contract will terminate if you lose your license and can’t practice. And some professions, if you’re uninsurable, you lose your DEA registration or privileges or staff membership. Someone can be fired for those things immediately, simply because they can’t perform their job. So, can an employer terminate an employee at any time? Sure, if a certain amount of notice is followed and the opposite can be true, the employee can terminate the contract at any point if a certain amount of notice is given.
It is a huge red flag if you’ll sign a contract for a fixed term without any ability to terminate the contract early. Many situations seem great from the outside, and then you get into the actual job, and it stinks for whatever reason. And in that scenario, you want the ability to move on.
And so, without a without-cause contract termination, it’s an enormous red flag. I would implore anyone considering signing an employment contract without one of those to rethink. I promise you; it is a bad idea. And once again, you have promises from the employer of how great it will be, but things can change when it starts and when you’re into the practice.
Contracts: Is an Offer Letter a Contract?
Is an offer letter a contract? In short, most likely, it is not. When a professional is entertaining a new position, many employers offer an offer letter, also known as a letter of intent. And then, that letter will break down the basics of the employment relationship. It’ll list compensation, potential bonus structure, probably the term of the agreement, how long it lasts, and maybe a few of the benefits: if there are non-compete, non-solicit, and if professional liability insurance is needed, perhaps who pays for tail insurance. So, just like essential bullet points, these are the things that will be incorporated into the employment contract.
Now, it does make sense to negotiate the main terms of the agreement before signing an offer letter. It’s kind of bad form to agree to a salary, get the offer letter, and then continue to negotiate after you’ve already negotiated. However, there are many times when you’ll agree to an offer letter. Then the employer will follow up with an employment agreement. Then the employment agreement terms may be much different than you were expecting. Maybe the specific language of the non-compete was much more restrictive than you were anticipating. Or perhaps if you’re paid purely on collections. The end of the collection as soon as the contract terminates. Then you missed out on 60 to 90 days of collections that percentage you should get.
An Offer Letter Is Not a Contract
Once you sign the offer letter, the question is, is it a binding contract? And the short answer is no. It’s not. Unless specific language in the offer letter states this is binding somehow, which would be extraordinarily rare. It’s just not done. Maybe in like academia when it’s more of a thorough offer letter, and that’s all that they’re providing. And then they’re just referring to a bunch of policies and procedures. Still, if it’s just a typical professional environment, then no, the offer letter will generally be general; we’ve agreed on terms.
However, the professional can continue negotiating, even if they’ve signed an offer letter. And even regarding the terms on which they have already agreed. The employer will likely not be happy if you come back at them and ask them to renegotiate terms. But if you’re going to do that, you need to explain why you’re doing it. Meaning, yes, this salary at 250,000 annually made sense. Still, you’re also giving me a three-year non-compete that covers five counties, which will effectively make me move once an agreement terminates. Taking that into account, 250,000 is not worth me taking this job.
So, giving the employer context as to why you agreed to compensation at one point, but now at this point, it’s no longer an amount you’re willing to work for is essential. And I think most intelligent employers will understand that nothing is final until you sign the employment agreement. Even though you’ve agreed to terms in the offer letter, it doesn’t mean that you can’t reopen those, but you must keep in mind that it may tick off the employer in some way.
Negotiate Terms in the Contract That Are Not in the Offer Letter
What about terms that aren’t listed in the offer letter but detailed in the employment agreement? Those are absolutely the terms that you should try to negotiate. And when I say negotiate, what do you do? If you have a signing bonus, ask for a little more. If you have a non-compete, try to reduce the amount of time of the non-compete. And try to reduce the geographic restriction if they’re not going to pay for professional liability insurance or tail insurance after the contract ends. Try to work out an agreement where they’ll pay for all of it, or maybe a portion of it.
As I stated before, if bonuses are involved, you want to ensure you’ve earned them or want to get them paid. Even if you’re not employed at the time that they’re typically paid out or maybe get them prorated. Many employees will get a signing bonus if there’s a forgiveness structure. And then in the contract, it’ll state that if they leave before this period, they’ll have to repay a portion of it. If you have annual forgiveness, then get that reduced to either quarterly or monthly forgiveness. If you have a two-year term on the agreement and received a $20,000 signing bonus, it may state that for each year you’re here, it’s forgiven one-half.
Negotiating for a Monthly Forgiveness of the Signing Bonus
Well, the employee should get that reduced to monthly. Because if you leave in the middle of the year and it is yearly forgiveness, you missed out on six months of forgiveness. Whereas if it’s monthly, you have six of the twelve months forgiven. You can negotiate plenty, even when you’ve signed an offer letter to a contract. In general, it is not binding. And you can constantly renegotiate terms. Once you sign the employment agreement, yes, those terms are final, and you’ll have to stand by whatever you already agreed. But as far as the offer letter goes, it’s still negotiable for the most part.

Other Blogs of Interest
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- Is There a Penalty for Early Termination of an Employment Contract?
- Termination of Contracts: Will I Be Paid My Bonus if I Terminate the Physician Contract Early?
Can You Write an Email to Terminate a Contract?
You probably shouldn’t, and your employment contract probably prohibits it. In any contract, it’s going to state how you can terminate an agreement. It could be for-cause, without-cause, mutual termination, or maybe the initial term ends. But in most cases, I mean most contracts are terminated without-cause termination. without-cause termination, either party can terminate the contract with a certain amount of notice to the other. Typically, around 30 to 90 days is a standard amount for most employment agreements. Suppose you are an employee, and for whatever reason, you don’t want to work for the employer anymore. In that case, you need to follow those terms written on the without-cause termination notice.
And it always needs to be written. It’s going to state that you must write a letter. And then, it will also state if it’s a 60-day without-cause termination. The employee has to provide it 60 days prior, work it out, and after the 60 days are over with. The employees are free to go once the contract terminates, and the employees are free to move on. To where they want to go after that—considering if there’s a non-compete or a non-solicit. Still, we’re not going to get into that today.
How Do Employees Communicate a Notice?
The most crucial part as far as this goes is it will be called notice or notices. It’s toward the back of the employment agreement initially provided by the company. And this will state who, then how you need to provide notice if there is communication.
An employee could provide in writing a certified letter overnight hand delivery of whatever termination notice you’re going to provide. And that would then be considered effective notice. Very few contracts allow email as an effective notice medium. If you gave, let’s say, you wrote an email telling your employer. I’m giving you without-cause termination notice, and I have 60 days; X will be my last day of work. I appreciate the opportunity. Well, if the email is not an effective communication medium within that notice section, that’s not considered effective notice. And then, the employer could make you work for another 60 days until you provide effective notice. So, that’s the most important part. You need to look in the notices section and determine if the proper way to terminate the agreement includes email.
I can tell you if I review a hundred contracts, 98 of them will not include email or fax. And you certainly can’t just verbally tell your employer you’re leaving. It must be in writing. And most often, it has to be sent either by certified mail or hand-delivered, depending on whether you work for a small practice or a big conglomerate with locations in every state. It’ll be impossible to hand-deliver the notice if you must provide notice to the headquarters, and that’s halfway across the country.
The Consequence of Notice Not Received
To be safe for the most part, you need to write a letter. You’ll have to print it out and send it via certified mail that the employer is using. Usually, it’s one or two. You must send it to the owner if it’s a smaller practice. If it’s a big conglomerate, you have to send it to probably your boss plus the legal apartment of the company as well. If you kind of look through, how much notice do I have to provide? And then how do I have to provide effective notice, you’ll be safe.
I have a couple of scenarios, and people have called me after the fact. And they’ll say I sent a letter to my employer’s email. I told them I was going to terminate the contract, and they didn’t say anything. I assumed that my contract would end on a specific date. The employer was mad about the employee leaving the company. The employer ticked off that they were leaving. So, what they did was they just sat on it for 45 days. And then, 15 days before the physician thought he was going to leave, they said, you didn’t provide us with effective notice. Email isn’t an effective form of communication to provide notice. You owe us another 60 days until you give us effective notice, meaning a written letter sent via certified mail.
And so, the physician had already lined up another job, he had a start date in mind, and then he had to return to the new employer. He would say, I apologize; I will have to delay my start date by almost two months. That was a tough pill to swallow for the physician. If you follow the terms of the notice section, then you should be okay.
Contract Termination: Can an Employee Terminate a Contract at Any Time?
The short answer is probably. However, it’s going to depend upon the language in the contract. There are ways that an employee can terminate an agreement: one, if there’s a fixed term, meaning a one-year, two-year, or three-year contract, and there’s no language that states the employment contract automatically renews, then at the end of that fixed term, if neither party is going to go or decided to sign another arrangement, the contract terminates, both parties can move on. That’s it. That’s one way on the agreement that can end a contract. Two, through mutual agreement. Maybe it’s not working out, and both parties are like, you know what? Let’s move on. You can mutually agree to terminate the agreement. Three, for the cause. A section called termination must be present in any employment contract.. In that section, it’s going to state how both parties can terminate the agreement.

Employee Contract Termination without-cause
Without-cause termination is going to be. If one party breaches the contract somehow, how can the other party terminate the contract for the breach? And in most of the for-cause termination clauses, it’s going to state if one party believes the other party is in breach, they must give them written notice. And then that party usually has a period to fix the breach. We called that a cure period. Usually, it would be somewhere between 15 to 30 days. Maybe the employee wasn’t getting paid a bonus that the employer said they would. The employee lets the employer know: you’re in breach of the employment contract, you have 15 days to pay me my bonus, or I can terminate the agreement immediately.
The employer can no longer terminate for-cause if the employer does pay the bonus. And then they could go to the last way of ending the contract without-cause.
Termination Notice Period
In every employment contract, this is very important. There should be a without-cause termination. It means either party can legally terminate the agreement at any point, for any reason, with a certain amount of notice to the other party. Usually, that notice period will be between 30 to 90 days. Why is this important? Suppose an employee takes a job and maybe they were lied to by the employer. In that case, if they’re on a production-based compensation from collections, commission, percentage, encounters, and healthcare RVUs, it doesn’t matter. But suppose an employee agreed to the contract and the employer gives no guaranteed base, daily rate, or guarantees. In that case, the volume is not nearly what they expected it to be or what the employer said it would be. They don’t have a way to get out of a contract without-cause.
The workers won’t have an exit in that job for whatever the length of the term is. That’s not something you want. You always want the ability to get out of the employment contract with a certain amount of notice in the scenario where the job isn’t what you expected. Maybe your boss is a terrible manager, or they’re placing you in a territory or location you don’t want to be assigned. I mean, hopefully, the employee could check on those in advance of signing the employment agreement. Sometimes, they’re not. Sometimes the employer just straight-up lies to the employee and says, oh yes, all these things are going to be there, and they’re not. Without the Without-cause, employees can insulate themselves from being stuck in a terrible situation for a long time without recourse.
Safety When You Need to Terminate an Employment Contract
So, can an employee terminate a contract at any time? If they have without-cause termination, remember that they must work the entire notice period. Like I said before, if it’s 30 days, give notice, work 30 days, and leave. Suppose you were to go before the end of the notice period. In that case, the employer could theoretically have damages and sue you for lost profits, recruiting, or replacement. So, if you have a notice requirement in your employment contract, you want to ensure that you give the proper amount of notice, work it out, and then move on and find a new job.
Can an Employee Terminate an Employment Contract?
The short answer is, obviously, yes. However, it will be determined based on the terms of the contract. In any employment contract, there will be a section that deals with the times, the employment contract’s length, and then termination, so how that contract ends. Let’s first talk about the terms of the agreement.
Most employment contracts will have a date, meaning it’s a year-long, two-year, or three-year contract. Then if the agreement doesn’t terminate, it will state a language. It will automatically renew for successive one-year terms. In that case, if a contract isn’t closed in another way after the initial period ends, it’ll just continue forever until terminated.
I would say there is a rarely fixed term with no language about automatic termination. If it’s just a two-year fixed term with no automatic renewal, it would just end at the end of two years, and that would be it. The parties can go their ways.
What Are the Reasons for Contract Termination?
Now, regarding terminating the contract, the first part is that if there is no renewal, it ends, and the employment contract ends. Second, by mutual agreement. Suppose the employer and the employee agree that the relationship isn’t working. In that case, they can always, by contract, decide to move on, and then that’s it, you can move on. Next would be with-cause termination. In this case, if someone breaches the employment contract, there’ll be language that states why the employer can fire the employee. If you need a license to perform the activity and lose your license, or if insurance is required and you’re uninsurable. There are, I guess, vague behavioral clauses.
If you’re disabled, you die, I mean, ordinary things, but there should also be a part called a cure. And so, in that case, if one of the parties believes the other party is in breach of an employment contract, the most common reason is just payment concerns. Either someone is unpaid, they were promised an amount in the associate employment agreement, or maybe the timing. Also, the bonus payment is involved, and there is disagreement over the professional owed amount. That’s always a big, I guess, the reason why there would be an allegation of breach of contract.
What Happens if Breach of Contract Is Committed?
If you believe the employer breached an employment contract, you’d have to provide them with written notice. And then the cure period means the employer would have a period to fix whatever the breach of associate contract is. Typically, that’s somewhere between 15 to 30 days. And the same can go for an employee.
If the employer thinks the employee is in breach of contract, they give them written notice, and then the employee has 15 to 30 days to fix the breach. If the breach is unfixed, the other party still believes the other party is in breach. Usually, that party has the option to terminate the dental associate agreements immediately. The last and most common way in most employment contracts is without-cause termination. There’ll be language that states that either party can terminate the employment agreement at any time, for any reason, with a certain amount of notice to the other party.
Typically, it would be somewhere between 30 to 90 days. Suppose the professional is unhappy and wants to move on. In that case, they give written notice saying I’m utilizing the without-cause termination notice in the employment contract. Then they must work out for 30, 60, or 90 days. Then at the end of that period, they can move on without any concerns regarding terminating the employment contract. Yes, an employee can terminate an employment contract, but they must follow the terms of the agreement.
Employment Contract Termination and Non-Compete Law
Just because an employee terminates, the contract doesn’t mean it necessarily ultimately ends at that point. They could be required of the employee if they terminate the contract. Many times, if given a signing bonus or relocation assistance, The employee would have to pay back a prorated portion of that if they left within the initial term of the employment agreement. Others could have non-compete associated with it.
So, just because an employee terminates the contract doesn’t mean that the non-compete doesn’t apply. It does, or at least it does in most circumstances if you’re in a state where non-competes are enforceable. How long will that last if there is a geographic restriction and then some temporary condition? That will continue even if the employee terminates the contract. If some malpractice insurance is involved and tail insurance is needed, it will say who must pay for that in the contract. Employees may also be responsible for that if they terminate the agreement. Although the employee can terminate the employment agreement, it doesn’t mean that there aren’t at least some strings attached.
One of the highest priority things I look at in the contract when I’m going over it with a professional. How do you get out of the agreement? And then what do you have to do if it ends within a certain period? In that way, the employee can know that I need to set aside this amount of money if I must pay for tail insurance or if I must pay back the signing bonus. So, they’re essential discussions and things employees could negotiate before signing any employment agreement. Hopefully, that was helpful—kind of an overview of termination of an employment contract.
How Can an Agreement Be Terminated?
You probably shouldn’t, and your employment contract probably prohibits it. In any agreement, it’s going to state how you can terminate an agreement. It could be for-cause, without-cause, mutual termination, or maybe the initial term ends. But in most cases, I mean most contracts are terminated without-cause termination. Without-cause termination, either party can terminate the contract with a certain amount of notice to the other. Typically, around 30 to 90 days is a standard amount for most employment agreements. Suppose you are an employee, and for whatever reason, you don’t want to work for the employer anymore. In that case, you must follow those terms written on the without-cause termination notice.
And it always needs to be written. It’s going to state that you must write a letter. And then, it will also say if it’s a 60-day without-cause termination. The employee has to provide it 60 days prior, work it out, and after the 60 days are over. The employees are free to go once the contract terminates, and the employees are free to move on. They want to go where they want to go after that—considering if there’s a non-compete or a non-solicit. Still, we’re not going to get into that today.
How Do Employees Communicate a Notice?
The most crucial part as far as this goes is that it will be called “notice” or “notices.” It’s toward the back of the employment agreement initially provided by the company. And this will state who, then how you need to provide notice if there is communication.
An employee could provide in writing a certified letter or overnight hand delivery of whatever termination notice you’re going to provide. And that would then be considered adequate notice. Very few contracts allow email as an effective notice medium. If you gave, let’s say, you wrote an email telling your employer. I’m giving you without-cause termination notice, and I have 60 days. X will be my last day of work. I appreciate the opportunity. Well, if the email is not an effective communication medium within that notice section, that’s not considered effective notice. And then, the employer could make you work for another 60 days until you provide adequate notice. So, that’s the essential part. You need to look in the notices section and determine if the proper way to terminate the employment agreement includes email.
I can tell you if I review a hundred employment contracts, 98 of them will not include email or fax. And you certainly can’t just verbally tell your employer you’re leaving. It must be in writing. And most often, it has to be sent either by certified mail or hand-delivered. It depends on whether you work for a small practice or a vast conglomerate with locations in every state. It’ll be impossible to hand-deliver the notice if you must provide notice to the headquarters, and that’s halfway across the country.
The Consequence of Notice Not Received
To be safe for the most part, you need to write a letter. You’ll have to print it out and send it via certified mail that the employer is using. Usually, it’s one or two. You must send it to the owner if it’s a smaller practice. If it’s a big conglomerate, you have to send it to probably your boss plus the legal apartment of the company as well. If you look through, how much notice do I have to provide? And then how do I have to provide effective notice? You’ll be safe.
I have a couple of scenarios, and people have called me after the fact. And they’ll say I sent a letter to my employer’s email. I told them I was going to terminate the employment contract, and they didn’t say anything. I assumed that my contract would end on a specific date. The employer was mad about the employee leaving the company. The employer ticked off that they were leaving. So, what they did was they just sat on it for 45 days. And then, 15 days before the physician thought he was going to leave, they said, you didn’t provide us with effective notice. Email isn’t an effective form of communication to provide notice. You owe us another 60 days until you give us adequate notice, meaning a written letter sent via certified mail.
And so, the physician had already lined up another job, he had a start date in mind, and then he had to return to the new employer. He would say, I apologize; I will have to delay my start date by almost two months. That was a tough pill to swallow for the physician. If you follow the terms of the notice section, then you should be okay.
How to Get Out of a Dental Associate Contract?
How to get out of a dental associate contract? You will sign one of two contracts when you are a dental associate. It’s either a dental employment contractor or an independent contractor agreement. Ultimately, it’s the same way of terminating the dental employment contract agreement. Still, I’m going to talk specifically about dental employment contracts because those are, I’d say, the standard type of dental associate agreement to sign.
Are Contractual Provisions For Length and Termination Present?
When the contract is signed, there will be language in the contract that states its term. So, how long it lasts and then termination means how either party can terminate the agreement. As far as the term is concerned, usually, it will be one of two things.
There is a fixed term with automatic renewals. It could be like a one-year term, which automatically renews for one year unless terminated. More often, there have been evergreen contracts where no term is listed. It just states the contract continues until someone ends it. One is not better than the other. It’s ultimately the same result. After you find out what the term is, go to the section about termination. The ways to terminate a contract are one, by mutual agreement. If both parties feel like it’s not working out, they don’t need or require a certain amount of notice. They just say, alright, this doesn’t work out. We’re both going to wash our hands of this and move on.
With Cause Termination
Two, if there was a fixed term, let’s just say it was one year, and there was no language about automatic renewal. If the one-year term expires and neither party decides to renew, it might terminate the contract. That’s it. Cause-termination is another type of termination. Suppose one party is in breach of contract. In that case, there’ll be language that states the party who thinks that the other party is in breach has to give them written formal notice that says, you’re in breach of contract due to this. And then, typically, there would be a language called a cure period. And the cure gives the party breaching the contract a period to fix whatever the problems are. Usually, it’s somewhere between 15 to 30 days.
In this scenario, let’s say the dental office is not paying a bonus they said they would, or it’s not timely. Whatever the issue, the dental associate would send them a letter saying, “We agreed that you would pay me this amount of bonus, but you haven’t paid this.” You are in breach of contract, you have 15 days to fix the breach, or I have the option of terminating the contract immediately. That’s one way to get out of the contract.
Without-Cause Termination
The last and most frequent way is through without-cause termination. Every contract agreement a dental associate sign needs to have without-cause termination. And that means either party can terminate the agreement at any time with a certain amount of notice. Why is this important? I find this, especially in the dental industry. The volume/if compensation tied to collections can be puffed up before the dentist starts. So, they might get into a situation where they’re being paid purely on production. The volume isn’t there, or they’re making nothing. And then they’re stuck in a contract if there’s no without-cause termination language.
So, what you want is somewhere between 30 to 90 days for without-cause termination notice. The way that would work is just like if someone is in breach. The dentist will then state in the written letters that I’m terminating the agreement, per without-cause termination. That is the most typical method of terminating a dental associate agreement. My last day at work will be X date. I must appreciate the opportunity. The same goes for them as well. If maybe they don’t think it’s working out with the dentist, they can give them notice. Then they can make the dentist work out whatever the notice period is, or sometimes they can just tell them, look, go home, or we don’t need you anymore.
Notice Period
However, they still must pay you for that notice period. So, if you had a 30-day notice, the dental office states were terminating the agreement. We don’t want you to come to work tomorrow. They still would have to pay the dentist for those 30 days. Now, the tricky part comes in. If you’re not on base salary, you’re not getting a daily rate, or you’re only getting paid on production. If you’re not productive, you’re not going to get paid. Then there needs to be a discussion before signing the contract and getting language in there. So that the dentist isn’t essentially working for free or not getting paid all for that notice period. There’s a notice period, at least in the healthcare field, generally for continuity of care. They don’t want a dentist or healthcare provider just not to show up one day and say I’m leaving.
And then there’s a bunch of patients on schedules, people who need work done, and there’s no one to provide that. They can put the patients in a tough spot if there’s just no notice and their provider leaves. It is not the dental associate’s problem. However, if they give enough information, these are the patients of the practice, not the dental associate. And so, when the dental associate terminates the employment agreement, once they leave. They have no obligations as far as the patients go or worry about referring them or transitioning somebody else. That’s the employer’s problem. So, to get out of a contract, the term can end. You can mutually agree to terminate it, terminate it for-cause termination. If the other party doesn’t fix a breach or give without-cause termination in a letter, finish your time and move on.
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